Garden Party

A healthy economy has put extra money in the pockets of millions of Americans, allowing them the luxury of everything green. Landscapers and arborists are among those with burgeoning business, providing a blossoming niche for commercial carriers.

Landscape creation, maintenance and renovation are big business these days and companies providing those services are-no pun intended-growing and flourishing as Americans spend more and more money on garden care.

The Gallup polling organization has followed America’s gardening passion for the last seven years and is predicting that this increase in spending is likely to continue as the economy hums along.

In 1999, according to a Gallup poll, some 24 million Americans spent $17.4 billion on professional landscape maintenance, design, installation and maintenance. Of that total, $2.6 billion was spent on professional tree care service, almost double the amount spent on tree care in 1993.

The numbers have been increasing steadily over the last six years, particularly in the area of tree care, where the number of households employing arborists and tree care specialists jumped from 4.6 million in 1993 to 7.73 million households in 1999.

“With people’s income increasing [and] the wellness of the economy, people have more income to spend on this type of thing,” said Mike Rook, an account executive with The Hartford.

The Hartford has been riding this wave of increased spending in landscape and tree services through its specialty program providing coverage to both small and large companies in this sector.

Rook said the program began in 1992 and quickly expanded throughout the country. “In 1996 we wrote $3 million and when we finish in 2000 we will have written about $12 million,” he said.

The Hartford benefits from an endorsement from the National Association of Arborists (NAA) which offers a link to the program (www.thehartford.com/arborists) from its own website (www.natlarb.com). Other companies offer similar coverages, but Rook said the market has recently tightened.

Among those underwriting coverage for landscaping and tree professionals is Orion Capital, recently acquired by Royal & Sun Alliance. The program administrator is New Jersey-based National Insurance Professionals Corporation (www.nipc.com), according to Karen Gaul, a spokeswoman for Royal & Sun. The coverages include programs dubbed TreePro, LandPro and a program for greenhouse businesses called Green Shield. All cover a range of businesses from very small to large operations.

Insurance is a critical factor for consumers who hire professional landscapers and tree surgeons, according to the Gallup survey. While the most important factor for consumers was a company’s good reputation and references, almost one-third of the survey respondents said they would require a company to have adequate insurance and bonding before they would hire them.

Gallup concluded that spending patterns on landscape services would continue to increase, particularly in those areas with vigorous development. Much of The Hartford’s business is centered in high growth areas like California, Florida and Texas, but the Northeast with its established neighborhoods is also a prime area.

The Gallup survey was commissioned by several professional associations whose members include potential customers for insurance coverage. They include the NAA, the International Society of Arboriculture (ISA), the American Nursery & Landscape Association (ANLA), the Associated Landscape Contractors of America (ALCA), and the Professional Lawn Care Association of America (PLCAA).

The survey covered four major sectors of the landscaping business:

• Lawn and landscape maintenance which includes lawn fertilization, mowing, renovation, insect/weed control, pruning and mulching; a $6.7-billion business in 1999, up from $6.4-billion in ’93.

• Landscape installation/construction including plants, walkways, fences, decks, pools and other water features; a $6.1-billion business in ’99, up from $5.6 billion in ’93.

• Landscape design including professional landscape design/architecture services; a sector that saw a significant increase from just under half a billion dollars in 1993 to $2.6 billion in 1999.

• Tree care including pruning, fertilization, repair, pest management, tree removal; increasing from $1.5 billion in 1993 to $2.6 billion in 1999.

While some landscaping companies offer planting and pruning services, arborists focus on the sometimes more dangerous work involving large, well-established trees. The Hartford’s arborist program does cover landscapers whose services include tree pruning, but the company likes that component to be less than 50 percent of the business.

Rook said companies range in size from “an individual businessman who has a pickup and a chipper to a large scale multi-million company with a half-million-dollar payroll.” However, through its association with the NAA, the Hartford is insuring legitimate companies with some degree of professional training in arboriculture.

The Hartford insures only those companies who are year-round, dependable companies, not the fly-by-night summertime operators who wander the neighborhoods in a “beat-up truck with a chain saw,” Rook said.

Companies ideally should have safety programs in place, Rook said, adding that The Hartford works with the NAA to supply information on safety and loss information.

The Hartford program has several components: coverage for buildings, protection against crime, building and property insurance, workers’ comp, equipment and tools coverage, general liability claims, loss control assistance and pesticide/herbicide coverage. Not all companies offer the herbicide/pesticide coverage, Rook said. That part of the plan is aimed at protecting the insured from claims caused by accidental spraying. For example, Rook said, one case brought by a homeowner in Missouri involved claims that herbicide had been sprayed into a small stream the landowner used as a drinking water supply. A small settlement was made in the case, Rook said.

Given the nature of the business, exposures include a wide variety of potential catastrophes—workers falling from ladders, tree limbs falling on roofs or cars, accidents with equipment, and workers’ comp claims from on-the-job injuries. “There’s a tremendous amount of exposure,” Rook said.

One new niche for The Hartford has been coverage of companies specializing in tree trimming around utility lines. These tree care utility companies are emerging in the market as utilities turn to subcontractors to perform this kind of work, Rook said.

America’s appetite for gardening is rooted in the affluence of the 50-plus generation. According to Gallup, the over-50 crowd is responsible for almost half of the $17.4 billion spent on landscaping services in 1999. As the affluent boomers age, Gallup expects that trend to continue.